Using social software to reinvent the customer relationship

The elimination of decades of inadequate communication channels will suddenly unleash a tide of many opportunities, as well as challenges, for most organizations.As Web 2.0 applications move more deeply into the strategic operations of enterprises, a unique hybrid of social software has emerged to help businesses deal with the giant sea of customers that awaits them on the other side of the network. While Enterprise 2.0 tools, primarily aimed at collaboration, are certainly part of this story, they often don’t help companies enjoy the full range of possibilities when it comes customer-facing social computing.

Enter the rapidly emerging Social CRM space, an area that’s become significant enough that there’s now a dedicated blog on the subject here on ZDNet by the terrific Paul Greenberg.

This year’s rise of enterprise social computing is opening a new front line in many businesses where the old ways of engaging with customers is no longer sufficient or even competitive. Many organizations I talk to these days are now evaluating the way social software seems to be altering the CRM landscape. In particular, Social CRM has recently come into its own as a leading model for this transformation. For comparison’s sake, online customer communities were a very hot topic last year in this same space, but as I pointed out then, it was surprisingly hard to create them repeatably. My sense is that Social CRM will be a more predictable, reliable model for applying Web 2.0 to customer relationships using many of the strengths of the community model.

Read Michael Krigsman’s 3 Big Reasons CRM Initiatives Fail

This is not to say that many of the social media tools that companies have deployed already aren’t good examples of Social CRM. Many of them are and this highlights a major discussion in the blogosphere last week sparked by SocialText’s Ross Mayfield, who posited that with Social CRM, the people are the platform. The key point here is that where online tools let customers have a social relationship with a business — in other words, interaction that is visible to them and other customers whenever possible — then some Social CRM is taking place. Without a fundamentally community-based relationship, you’re just back to traditional, one-on-one push management of customers. This latter model, a closed and asocial mode of customer interaction, is the very antithesis of Social CRM.

Social CRM: It’s all about people

For its part, Social CRM paints a vision of creating a deeper and more engaging community-based relationship with your customers, instead of the traditional approach of managing them, in a very Cluetrain Manifesto way. Part online community, part crowdsourcing, part customer service, Social CRM can create an emergent, collaborative online partnership with customers that can result in an array of improvements to business performance.

Far from being just for the benefit of the business however, with Social CRM customers tend to 1) be much more in control, 2) are in sustained contact with the organizations they care about, and 3) can use self-service, mutually visible participation, collective history, and peer relationships to assist each other as much — and often much more — than the classic CRM model ever could.

But like any composite, heterogeneous group of participants, Social CRM necessarily entails less deterministic control and outcomes. For example, these new Social CRM tools will let anyone ask a question publicly and anyone else in the community (customers or employees) answer it. Or provide a means to let new ideas flow in from the community in a very Dell IdeaStorm fashion. The question of who decides what the right “official” answer is, or which ideas will be selected and how non-employee submitters will be compensated are currently hard questions to answer for many organizations.

Then there is the challenge that by its very nature Social CRM is asymmetric when it comes to levels of participation; there are always many more customers than there are workers. The key then will be to have ways to effectively deal with the number of customers that will interact with a business via these new channels while still governing the relationship to make it consistently responsive and successful from a customer perspective. All of this too will have to operate within the varied requirements of legal, marketing, corporate communications, customer service, and even product development.

Sound complicated? While it can be, particularly for larger organizations, there are now some straighforward success stories to point to. The popular customer service community GetSatisfaction is good example of a targeted Social CRM application designed precisely for some of these problems. It can help organizations deal effectively with “conversational scale” from the largest company down to the smallest garage business all while having consistent policies and procedures for responses to customer-initiated social engagement. GetSatisfaction currently offers over 20,000 customer communities including robust ones from Microsoft and Apple. Intriguingly though, I had a very hard time finding a non-tech company using GetSatisfaction extensively, showing the early days yet of this approach.

However, GetSatisfaction is primarily limited to customer service inquiries. There is an entire spectrum of social customer engagement that organizations will want to adopt over time and it begs the question of the ideal range of functions that a Social CRM tool should have. Like Enterprise 2.0, there are Social CRM tools large and small, simple and sophisticated. So while an organization’s requirements will certainly vary, as they grow they are going to want the option to expand the nature of the social relationships they maintain with the marketplace, whether that is marketing, sales, customer service, product development, or other business functions. Because the best social tools aren’t overly structured (social computing is a dynamic and highly fluid activity), the answer seems to lie in tools that exhibit many of the same properties as successful Web 2.0 and Enterprise 2.0 products today.

Four key aspects of Social CRM

At a minimum, a capable Social CRM software platform should have the following capabilities:

1. A social environment. Customers must be able to create an identity and perceive other customers, as well as individual workers, and be able to interact with both types of parties in a Social CRM environment.
2. Customer participation mechanisms. While discussion forums are very open ended and can be used for many types of participation, Social CRM becomes more strategic when there are participation mechanisms that are driven by the specific needs of the organization or its customers. These might include social customer support, competitive contests, innovation/prediction markets, or joint product design, perhaps with finely tuned controls (such as Kluster). I suspect the best Social CRM tools will have pluggable participation “apps” that let third parties offer rapidly deployable, industry specific architectures of participation — very similar to Apple’s successful App Store — but aimed at lightly structured customer participation scenarios.
3. Shared collective intelligence.Web 2.0 applications are most successful when they create a shared repository of information created by the joint participation of its users. Good Social CRM tools will make sure that the directed activities of a Social CRM environment are accumulated, discoverable, and reusable. The artifacts of this activities are likely customer problem resolutions, product improvements, sales opportunities, etc. In other words, “relationships that get better the more people use them” would be a good way to paraphrase one of the key mantras of 2.0 applications in a CRM context. Incidentally, this will be a primary way that traditional organizations will build successful network effects, the new measure of competitive effectiveness and market share in the 21st century.
4. Mechanisms to deal with conversational scale. There is still a fear that deploying social tools to interact with online customers en masse will create unexpected costs or overhead as thousands — and in some organization’s cases — millions of customers try to engage with them. Since most existing social media tools are often not designed explicitly to deal with this, this is an area where Social CRM tools will hopefully shine. SLAs that guarantee that customers eventually get a response if the community at large doesn’t or tools that bucket identical inquiries together as well as other scaling mechanisms will be essential for Social CRM to produce effective results.

However, the biggest issues in adopting Social CRM is not the technology, not the tools, and certainly not the customer. It’s changing the mindset about what CRM is all about. It’s not about managing or riding herd over customers. It’s about forming a close partnership, where the organization still has a leadership role, and where intelligent use of social environments can result in vibrant customer community relationships. The elimination of decades of inadequate communication channels, however, will suddenly unleash a tide of many opportunities — as well as challenges — for most organizations.

Over the coming months I’ll be taking a look at some leading Social CRM tools such as HelpStream, Lithium, and others. I’ll be comparing them to their social media and Enterprise 2.0 brethren, along with some early case studies.

Is your organization looking to adopt some form of Social CRM? Please tell your story in Talkback below.